Income Tax Act ( R.S.C. , 1985, c. 1 (5th Supp.))

and of a partnership includes any partnership property that is used primarily for the personal use or enjoyment of any member of the partnership or for the personal use or enjoyment of one or more individuals each of whom is a member of the partnership or a person related to such a member; ( biens à usage personnel )

of a taxpayer for a taxation year means a particular property that is a housing unit, a leasehold interest in a housing unit or a share of the capital stock of a co-operative housing corporation acquired for the sole purpose of acquiring the right to inhabit a housing unit owned by the corporation and that is owned, whether jointly with another person or otherwise, in the year by the taxpayer, if

(a) where the taxpayer is an individual other than a personal trust, the housing unit was ordinarily inhabited in the year by the taxpayer, by the taxpayer’s spouse or common-law partner or former spouse or common-law partner or by a child of the taxpayer,
(a.1) where the taxpayer is a personal trust, the housing unit was ordinarily inhabited in the calendar year ending in the year by a specified beneficiary of the trust for the year, by the spouse or common-law partner or former spouse or common-law partner of such a beneficiary or by a child of such a beneficiary, or
(b) where the taxpayer is a personal trust or an individual other than a trust, the taxpayer
- (i) elected under subsection 45(2) that relates to the change in use of the particular property in the year or a preceding taxation year, other than an election rescinded under subsection 45(2) in the taxpayer’s return of income for the year or a preceding taxation year, or
- (ii) elected under subsection 45(3) that relates to a change in use of the particular property in a subsequent taxation year,
except that, subject to section 54.1, a particular property shall be considered not to be a taxpayer’s principal residence for a taxation year
- (c) where the taxpayer is an individual other than a personal trust, unless the particular property was designated by the taxpayer in prescribed form and manner to be the taxpayer’s principal residence for the year and no other property has been designated for the purposes of this definition for the year
  - (i) where the year is before 1982, by the taxpayer, or
  - (ii) where the year is after 1981,
    - (A) by the taxpayer,
    - (B) by a person who was throughout the year the taxpayer’s spouse or common-law partner (other than a spouse or common-law partner who was throughout the year living apart from, and was separated under a judicial separation or written separation agreement from, the taxpayer),
    - (C) by a person who was the taxpayer’s child (other than a child who was at any time in the year a married person, a person who is in a common-law partnership or 18 years of age or older), or
    - (D) where the taxpayer was not at any time in the year a married person, a person who is in a common-law partnership or 18 years of age or older, by a person who was the taxpayer’s
      - (I) mother or father, or
      - (II) brother or sister, where that brother or sister was not at any time in the year a married person, a person who is in a common-law partnership or 18 years of age or older,
      - (i) the particular property was designated by the trust in prescribed form and manner to be the taxpayer’s principal residence for the year,
      - (ii) the trust specifies in the designation each individual (in this definition referred to as a “specified beneficiary” of the trust for the year) who, in the calendar year ending in the year,
        
        (A) is beneficially interested in the trust, and
        
        (B) except where the trust is entitled to designate it for the year solely because of paragraph (b), ordinarily inhabited the housing unit or has a spouse or common-law partner, former spouse or common-law partner or child who ordinarily inhabited the housing unit,
        
        (A) a trust
        
        (I) for which a day is to be determined under paragraph 104(4)(a), (a.1) or (a.4) by reference to the death or later death, as the case may be, that has not occurred before the beginning of the year, of an individual who is resident in Canada during the year, and
        
        (II) a specified beneficiary of which for the year is the individual referred to in subclause (I),
        
        (I) that is a (as defined in subsection 122(3)) for the year, and
        
        (II) an (in this clause, as defined in subsection 122(3)) of which for the year is 1 resident in Canada during the year, 2 a specified beneficiary of the trust for the year, and 3 a spouse, common-law partner, former spouse or common-law partner or child of the (in this subparagraph, as defined in subsection 108(1)) of the trust,
        
        (I) a specified beneficiary of which for the year is an individual 1 who is resident in Canada during the year, 2 who has not attained 18 years of age before the end of the year, and 3 a mother or father of whom is a settlor of the trust, and
        
        (II) in respect of which either of the following conditions is met: 1 no mother or father of the individual referred to in subclause (I) is alive at the beginning of the year, or 2 the trust arose before the beginning of the year on and as a consequence of the death of a mother or father of the individual referred to in subclause (I), or
        
        (I) a specified beneficiary of which for the year is a qualifying individual for the year in respect of the trust, and
        
        (II) under which no person other than a beneficiary described in subclause (I) may receive or otherwise obtain the use of, during the beneficiary’s lifetime, any of the income or capital of the trust and the trustees are required to consider the needs of the beneficiary including, without limiting the generality of the foregoing, the comfort, care and maintenance of the beneficiary, and
        
        (A) mother or father, or
        
        (B) brother or sister, where that brother or sister was not during that calendar year a married person or a person who is in a common-law partnership or a person 18 years or over, or
        
        and, for the purpose of this definition,
        
        (e) the principal residence of a taxpayer for a taxation year shall be deemed to include, except where the particular property consists of a share of the capital stock of a co-operative housing corporation, the land subjacent to the housing unit and such portion of any immediately contiguous land as can reasonably be regarded as contributing to the use and enjoyment of the housing unit as a residence, except that where the total area of the subjacent land and of that portion exceeds 1/2 hectare, the excess shall be deemed not to have contributed to the use and enjoyment of the housing unit as a residence unless the taxpayer establishes that it was necessary to such use and enjoyment,
        
        (f) a particular property designated under paragraph (c.1) by a trust for a year shall be deemed to be property designated for the purposes of this definition by each specified beneficiary of the trust for the calendar year ending in the year, and
        
        (g) a qualifying individual, for a taxation year in respect of a trust, means an individual who meets the following conditions:
        
        (i) the individual is, in the year, any of
        
        (A) the settlor of the trust,
        
        (B) the child, grandchild, great grandchild, parent, grandparent, great grandparent, brother, sister, uncle, aunt, niece or nephew of the settlor or of the spouse or common-law partner or former spouse or common-law partner of the settlor, and
        
        (C) the spouse or common-law partner or former spouse or common-law partner of any person described in clause (A) or (B),
        
        of property includes,
        
        (a) the sale price of property that has been sold,
        
        (b) compensation for property unlawfully taken,
        
        (c) compensation for property destroyed, and any amount payable under a policy of insurance in respect of loss or destruction of property,
        
        (d) compensation for property taken under statutory authority or the sale price of property sold to a person by whom notice of an intention to take it under statutory authority was given,
        
        (e) compensation for property injuriously affected, whether lawfully or unlawfully or under statutory authority or otherwise,
        
        (f) compensation for property damaged and any amount payable under a policy of insurance in respect of damage to property, except to the extent that such compensation or amount, as the case may be, has within a reasonable time after the damage been expended on repairing the damage,
        
        (g) an amount by which the liability of a taxpayer to a mortgagee or hypothecary creditor is reduced as a result of the sale of mortgaged or hypothecated property under a provision of the mortgage or hypothec, plus any amount received by the taxpayer out of the proceeds of the sale,
        
        (h) any amount included in computing a taxpayer’s proceeds of disposition of the property because of section 79, and
        
        (i) in the case of a share, an amount deemed by subparagraph 88(2)(b)(ii) not to be a dividend on that share,
        
        but notwithstanding any other provision of this Part, does not include
        
        (j) any amount that would otherwise be proceeds of disposition of a share to the extent that the amount is deemed by subsection 84(2) or (3) to be a dividend received except to the extent the dividend is deemed
        
        (i) by paragraph 55(2)(b) to be proceeds of disposition of the share, or
        
        (ii) by subparagraph 88(2)(b)(ii) not to be a dividend, or
        
        of a taxpayer is capital property of the taxpayer that is
        
        (a) a share,
        
        (b) a capital interest in a trust,
        
        (c) an interest in a partnership, or
        
        (d) an option to acquire specified property of the taxpayer; ( bien déterminé )
        
        of a taxpayer means the taxpayer’s loss from the disposition of a particular property where
        
        (a) during the period that begins 30 days before and ends 30 days after the disposition, the taxpayer or a person affiliated with the taxpayer acquires a property (in this definition referred to as the “substituted property”) that is, or is identical to, the particular property, and
        
        (b) at the end of that period, the taxpayer or a person affiliated with the taxpayer owns or had a right to acquire the substituted property,
        
        except where the disposition was
        
        (c) a disposition deemed to have been made by subsection 45(1), section 48 as it read in its application before 1993, section 50 or 70, subsection 104(4), section 128.1, paragraph 132.2(3)(a) or (c), subsection 138(11.3) or 138.2(4) or 142.5(2), section 142.6 or any of subsections 144(4.1) and (4.2) and 149(10),
        
        (d) the expiry of an option,
        
        (e) a disposition to which paragraph 40(2)(e.1) applies,
        
        (f) a disposition by a taxpayer that was subject to a loss restriction event within 30 days after the disposition,
        
        (g) a disposition by a person that, within 30 days after the disposition, became or ceased to be exempt from tax under this Part on its taxable income, or
        
        (h) a disposition to which subsection 40(3.4) or 69(5) applies,
        
        and, for the purpose of this definition,
        
        (i) a right to acquire a property (other than a right, as security only, derived from a mortgage, hypothec, agreement for sale or similar obligation) is deemed to be a property that is identical to the property, and
        
        (j) a share of the capital stock of a SIFT wind-up corporation in respect of a SIFT wind-up entity is, if the share was acquired before 2013, deemed to be a property that is identical to equity in the SIFT wind-up entity. ( perte apparente )
        
        [NOTE: Application provisions are not included in the consolidated text
        
        see relevant amending Acts and regulations.]
        
        R.S., 1985, c. 1 (5th Supp.), s. 54
        
        1994, c. 7, Sch. II, s. 31, Sch. VIII, s. 16, c. 21, s. 23
        
        1995, c. 3, s. 15, c. 21, ss. 18, 77
        
        1998, c. 19, s. 95
        
        2000, c. 12, ss. 130(F), 142, c. 19, s. 5
        
        2001, c. 17, ss. 37, 207(E)
        
        2009, c. 2, s. 12
        
        2011, c. 24, s. 9
        
        2013, c. 34, ss. 107, 191, c. 40, s. 23
        
        2016, c. 7, s. 4, c. 12, s. 17
        
        2017, c. 33, s. 13
        
        2018, c. 27, s. 4
        
        2023, c. 26, s. 10
        
        2024, c. 17, s. 11(E)